Karnataka High Court
K Venkatesh Reddy vs K Srinivasan on 6 January, 2023
Bench: J.M.Khazi
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6TH DAY OF JANUARY, 2023
BEFORE
THE HON'BLE MS.JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.1260 OF 2011
BETWEEN:
K VENKATESH REDDY
S/O M KRISHNA REDDY
AGED ABOUT 39 YEARS
R/AT NO.32, NEAR
SRI RAMA TEMPLE
NEW THIPPASANDRA
BANGALORE - 560 074
...COMPLAINANT / APPELLANT
(BY SRI. LOKESH L N, ADVOCATE FOR
SRI. B.PRAMOD, ADVOCATE)
AND:
K SRINIVASAN
S/O KRISHNAPPA
AGED ABOUT 35 YEARS
R/AT NO.14/11A,
2ND CROSS, PRAKASH NAGAR,
HOSUR TOWN - 635 109
KRISHNAGIRI DIST
TAMIL NADU
...ACCUSED / RESPONDENT
(BY SRI. NAVEEN KUMAR B, ADVOCATE &
SRI. P.M.NATARAJ, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378
(4) OF THE CODE OF CRIMINAL PROCEDURE PRAYING TO i)
ALLOW THE ABOVE APPEAL, SET ASIDE THE IMPUGNED
JUDGMENT DATED 18.11.2011 PASSED BY THE LEARNED
PRESIDING OFFICER, FAST TACK COURT-III AND
ADDITIONAL SESSIONS JUDGE, MAYO HALL UNIT,
2 Crl.A.No.1260/2011
BANGALORE IN CRL.A.NO. 25148/2010 AND CONSEQUENTLY
RESTORE THE JUDGMENT OF CONVICTION AND SENTENCE
PASSED BY THE LEARNED V ADDITIONAL JUDGE, COURT OF
SMALL CAUSES AND 24TH ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL UNIT, BANGALORE IN
C.C.NO.31974/2008 DATED 19.10.2010; AND ii) GRANT ANY
OTHER RELIEF OR RELIEFS AS THIS HON'BLE COURT MAY
DEEM FIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE
INCLUDING COSTS/ COMPENSATION IN THE INTEREST OF
JUSTICE AND EQUITY.
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED ON 25.11.2022, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
JUDGMENT
In this appeal, complainant has challenged the
judgment and order of the Sessions Court, by which it has
set aside the conviction and sentence of
respondent/accused for the offence punishable under
Section 138 of the Negotiable Instruments Act, 1881
(hereinafter referred to as 'the N.I. Act' for short) passed
by the trial Court.
2. For the sake of convenience the parties are
referred to by their rank before the trial Court.
3. Complainant filed C.C.No.31974/2008 under
Section 200 of Cr.P.C. for the offence punishable under
Section 138 of the N.I. Act, alleging that he entered into a
registered lease agreement dated 21.06.2006 in respect of
factory unit situated in Sy.No.714/2A measuring 1.82 acres
out of total extent of land measuring 4.5 acres, together
with stone crushing machine and other related machines
and spares. He entered into said agreement based on the
representation by the accused that he is having license to
run the factory. It was for a period of two years which could
be extended. Pursuant to the said agreement, he made
security deposit of Rs.5,00,000/- and agreed to pay rent at
the rate of Rs.50,000/- p.m. He also paid Rs.15,00,000/- to
the labour contractor for providing labour for one year.
3.1 It is further case of the complainant that the
factory was seized by the Mines and Geology Authority,
Tamil Nadu on the ground that accused is not possessing a
valid license to run the factory. On account of the same,
complainant incurred huge loss. Subsequently, the
aforementioned lease deed came to be cancelled.
3.2 Complainant demanded accused to compensate
him for the loss suffered. The negotiations took place in the
presence of Sri. S.M. Ramesh, who acted as a mediator.
During the said negotiation, accused agreed to pay a sum
of Rs.3.5 lakhs towards the loss suffered by the
complainant and issued a post dated cheque No.205151
dated 05.01.2008 and assured that it would be honoured
on presentation. Though at the request of accused,
complainant presented the cheque for encashment on
01.02.2008, 08.03.2008 and 25.04.2008, on all the three
occasion, it was returned dishonoured on the ground of
insufficient funds.
3.3. Therefore, complainant got issued a statutory
notice dated 07.05.2008 calling upon the accused to pay
the amount due under the cheque. Though it is duly
served, accused has purposely not received the one sent
through RPAD. However, the one sent under Certificate of
Posting is served on him. But accused has not sent any
reply. Complainant also issued a legal notice to
Sri.S.M.Ramesh, who was the mediator intimating him
about the dishonour of cheque and requested him to use
his good office to get the payment made. Sri.S.M.Ramesh
has sent reply stating that he has met the accused and he
has assured to arrange for the funds. Inspite of lapse of
statutory period, accused has not made any arrangement
to make payment of the amount due under the cheque and
hence, the complaint.
4. After due service of summons, accused has
appeared and contested the matter.
5. He pleaded not guilty and claimed trial.
6. In order to prove the allegations against the
accused, complainant got himself examined as PW-1. He
has relied upon Ex.P1 to 11.
7. During the course of his statement under
Section 313 Cr.P.C., accused has denied the incriminating
evidence.
8. He has not stepped into the witness box.
However, during the cross-examination of PW-1, he has got
marked Exs.D1 and 2.
9. Vide the judgment and order dated 19.10.2010,
the trial Court convicted the accused and sentenced him to
undergo simple imprisonment for a period of six months
and pay fine of Rs.4,00,000/-, and out of the compensation
amount, Rs.3,90,000/- be paid to the complainant by way
of compensation.
10. Accused challenged the same before the
Sessions Court in Crl.A.No.25148/2010. Vide Order dated
08.11.2011, the Sessions Court allowed the appeal and
acquitted the accused.
11. Being aggrieved by the same, the complainant
has come up with this appeal.
12. During the course of arguments, learned
counsel for complainant submitted that the reasons
assigned by the Sessions Court in setting aside the
conviction are unsustainable in law. It has failed to
appreciate the admission of accused that the subject
cheque is issued by him, but has taken a false defence that
it was issued towards security. However, there is no
reference to the same in the lease agreement. The perusal
of the lease deed indicate that security deposit is shown as
Rs.5,00,000/- under Cheque No.010268 dated 01.06.2006.
Therefore, the subject cheque is not towards security
deposit and as such, the defence taken by the accused is
palpably false.
12.1 Learned counsel for the complainant further
submitted that the Sessions Court has failed to appreciate
the fact that complainant has suffered loss on account of
accused not holding a valid license and therefore, he has
issued the subject cheque to compensate the complainant.
Since the issue of cheque and signature by the accused is
admitted, presumption under Section 139 of the N.I. Act is
in favour of the complainant and burden is on the accused
to rebut the said presumption. However, accused has failed
to rebut the presumption and as such, he is liable to be
convicted.
12.2 He would further submit that since the
cheque came to be issued to compensate the loss suffered
by the complainant on account of accused, the cheque in
question relates to the transaction between the
complainant and accused and as such, the Sessions Court
has erred in holding that after termination of lease
agreement, there was no contractual relationship between
the parties and as such, there was no occasion for the
accused to issue the cheque at Ex.P2. The impugned
judgment and order setting aside a well reasoned judgment
of the trial Court is erroneous and prays to allow the appeal
and restore the same.
13. In support of his arguments, the learned
counsel for complainant has relied upon M/s Kalamani
Tex and Anr. Vs. P. Balasubramanian1 (M/s Kalamani's
case).
14. On the other hand, the learned counsel for the
accused supported the impugned judgment and order of
the Sessions Court and prays to dismiss the appeal.
15. Heard arguments of both sides and perused the
record.
16. Since the accused has not disputed that Ex.P2
cheque belongs to him and it bears his signature and it is
drawn on the account maintained by him with his Banker,
the presumption under Sections 118 and 139 of the N.I.Act
is in favour of the complainant and burden is on the
accused to prove the circumstances in which the said
cheque came to be issued and thereby it is not issued
towards repayment of any debt or liability.
17. Before going to the merits of the case, let me
note the undisputed facts. The fact that complainant and
accused have entered into a registered lease agreement
(2021) 5 SCC 283
dated 21.06.2006 for a period of two years and it came to
be terminated by surrender of lease document dated
26.06.2007 is not in dispute. Though the complainant
during the course of the complaint has pleaded that the
said factory came to be seized by the Government
Authorities on the ground that the accused did not possess
a valid license to run the factory and therefore, complainant
sustained huge loss, during his cross examination, he has
admitted that in respect of surrender of the lease, Ex.D-1
came to be executed and in the said document, it is stated
that lessee i.e., complainant is not interested in continuing
the lease.
18. In other words, the lease is not surrendered on
account of failure of the complainant to secure license but
since complainant was not interested in continuing the
lease. If at all the complainant could not continue with the
lease on account of non obtaining of license, there was no
impediment to state the same in Ex.D-1. Thus, at the
earliest available opportunity while executing the surrender
of lease document at Ex.D-1, there was no impediment for
the complainant to state the said reason. However, Ex.D-1
makes it clear that the said lease is surrendered by the
complainant as he was not interested in continuing the
same. As rightly pointed out during the course of appeal
memo, the accused has issued a cheque for Rs.5,00,000/-
towards security deposit bearing No.010268 dated
01.06.2006 and it is not the subject cheque. Therefore, the
contention of the accused that Ex.P2 cheque was issued by
way of security and since it was blank, complainant has
misused the same, cannot be accepted.
19. However, the complainant is required to prove
that subsequent to the surrender of the lease, the
complainant and accused have negotiated in the presence
of one Sri. S.M. Ramesh and accused issued a post dated
cheque for Rs.3.5 Lakhs. During his cross examination, PW-
1 has admitted that during the said negotiation, he and
accused have not entered into any written agreement, but
only the cheque came to be issued. In the absence of any
written document, what the least the complainant could
have done was to examine the said Sri.S.M. Ramesh to
prove that after admitting that complainant has suffered
loss, accused agreed to pay a sum of Rs.3.5 lakhs towards
compensation and accordingly, issued the subject cheque.
20. Though the complainant has denied that at the
time of redelivering the possession of the premises, he had
taken one blank cheque from the accused as security,
during his cross examination, he has deposed that he came
into custody of the cheque on 05.10.2007. However, he has
denied that misusing the blank cheque, he has filed this
complaint. As per Ex.D2, which is dated 04.06.2007, which
is much earlier to the surrender of lease deed dated
26.06.2007, the complainant has returned Rs.15,00,000/-
in the form of two cheques for Rs.5,00,000/- each and cash
in the sum of Rs.5,00,000/-. While returning the said
amount also, the complainant has not alleged that he has
suffered any loss and therefore, he is retaining any sum. As
rightly held by the Sessions Court, after execution of
Exs.D1 and 2, the relationship between the complainant
and accused came to an end. Therefore, if on account of
complainant suffering any loss, he and accused have
entered into a negotiation by which accused agreed to pay
a sum of Rs.3.5 lakhs by way of compensation and this is
based on oral agreement, then the complainant was
required to examine one S.M. Ramesh to prove the same.
21. In the absence of the same, Exs.D-1 and D2 not
having such averments, the oral testimony of complainant
is not sufficient to discharge the burden. Though the
presumption under Section 139 of N.I.Act is acting against
the accused, through the cross-examination of PW-1, the
accused has proved his defence and discharged the burden
placed on him. When the lease came to be surrendered by
the complainant on his own and when he has failed to
prove that the lease came to be stopped by the
Government Officials for not having license, the burden
shifts on him to prove that Ex.P2 cheque came to be issued
by the accused subsequent to the surrender of the lease
and it is towards compensating him. However, the
complainant has failed to discharge this burden.
22. The contention raised by the complainant is
contrary to the contents of Exs.D1 and 2. Since the trial
Court failed to appreciate these aspects and convicted the
accused, rightly, the Sessions Court has reversed the same.
I find no reason to interfere with the considered judgment
of the Sessions Court. In the result, the appeal fails and
accordingly, the proceed to pass the following:
ORDER
i) Appeal filed by complainant under Section
378(4) of Cr.P.C is hereby dismissed.
ii) The judgment and order dated 18.11.2011 in
Crl.A.No.25148/2010 on the file Presiding
Officer, Fast Tract Court-III & Addl.Sessions
Judge, Bengaluru setting aside the conviction
of the accused in C.C.No.31974/2008 dated
19.10.2010 on the file V Addl.Judge, Court of
Small Causes & 24th ACMM, Bengaluru is
confirmed.
iii) Registry is directed to return the trial Court
and Sessions Court records along with copy
of this judgment forthwith.
Sd/-
JUDGE
MDS
